Inflation Creates Uncertainty Because

question 111

Multiple Choice

Inflation creates uncertainty because

• A) nominal values of prices and wages are unknown.
• B) it rapidly increases output.
• C) real interest rates,prices,and wages are unknown.
• D) borrowing continues at a rapid pace,creating a "false boom."
• E) although price confusion problems are eliminated,the shoe-leather costs are exacerbated.

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Definitions:

Production Department

A division within a company that is responsible for the manufacture of goods.

Investigation

The systematic examination or inquiry into something to establish facts and reach new conclusions.

Materials Price Variance

It measures the difference between the actual cost of materials used in production and the expected (standard) cost.

Price Standard

A predetermined cost that management believes should be paid for an item, often used in budgeting and variance analysis.